Commitments and Contingencies
|6 Months Ended
Jun. 30, 2023
|Commitments and Contingencies.
|Commitments and Contingencies
Note 5 – Commitments and Contingencies
In 2015, the Company entered into a licensing agreement which expires in February 2033. Per the agreement, the Company has an exclusive royalty-free license associated with semiconductor power switches which enhances its intellectual property portfolio. The Company will pay $100,000 annually under this agreement.
In April 2023, the Company amended a 2021 license agreement which expires in February 2034. Per the agreement, the Company has an exclusive royalty-free license associated with semiconductor drive circuitry which enhances its intellectual property portfolio. The Company will pay $50,000 annually under this agreement. At inception, the Company recorded an intangible asset and other long-term liability of $451,557, of which $50,000 is in accrued expenses at June 30, 2023, for the estimated present value of future payments under the licensing agreement.
At June 30, 2023 and December 31, 2022, the other long-term liability for the estimated present value of future payments under the licensing agreements was $1,180,005 and $838,458, respectively. The Company is accruing interest for future payments related to these agreements.
The Company may be subject to litigation from time to time in the ordinary course of business. The Company is not currently party to any legal proceedings.
The employment agreements of Company executives include an indemnification provision whereby the Company shall indemnify and defend, at the Company’s expense, its executives so long as an executive’s actions were taken in good faith and in furtherance of the Company’s business and within the scope of executive’s duties and authority.